Slide 1: Q3 2004 Financial Report
Lars-Johan Jarnheimer President and CEO Q3 2004 Financial Report
Slide 2: We remain a growth company
We remain a growth company Q3 Revenue growth of 14% with customer intake over 1 million Mobile and Fixed has stabilized in Sweden Tremendous improvement in Central Great pick up in Baltic & Russia, particularly in Russia Disappointment in Southern Europe 2
Slide 3: Churn – what is happening?
Churn – what is happening? In most markets churn is stable In Southern Europe and the Netherlands churn rose Incumbents - maintained a high level of marketing activity/aggressive win back campaigns throughout the summer…so • We have taken substantial steps to counter churn in these markets • W
Slide 4: Customer additions
Customer additions Over 1 million subscribers added in Q3 2004 Gross additions in Q3 2004 are above the level of Q3 2003 and Q2 2004 Strong customer intake in Baltic & Russia and Central Europe Reduction in cross selling to fixed line customer base means 350,000 fewer dial-up Internet custom
Slide 5: Song Networks and UTA
Song Networks and UTA Cash Bid for Song Networks launched on Sept 29 – SEK 85 per share valuing Song at SEK 4.95 billion Prospectus published and approval received from Finnish Competition Authorities UTA acquisition announced on Oct 14 for €213 million on a debt free basis We expect annual
Slide 6: 25.9 million customers
25.9 million customers Nordic Nordic Total Total Subscribers: Subscribers: FINLAND FINLAND 6,706,000 6,706,000 RUSSIA NORWAY NORWAY Central SWEDEN ESTONIA Central Europe Europe SWEDEN ESTONIA Total Subscribers: Total Subscribers: LATVIA LATVIA 55,058,000 ,058,000 DENMARK DENMARK LITHUANIA LITHUANIA
Slide 7: Nordic highlights
Nordic highlights (MSEK) Q3 2004 Q3 2003 % Change Operating Revenue 3,559 3,427 +4 EBITDA 1,000 1,158 -14 EBIT 785 936 -16 Nordic market is sound Margins in Swedish mobile and fixed are now sequentially stable, despite market competition and lower mobile interconnect rates compared to last year
Slide 8: Baltic & Russia highlights
Baltic & Russia highlights (MSEK) Q3 2004 Q3 2003 % Change Operating Revenue 884 752 +18 EBITDA 239 229 +4 EBIT 110 151 -27 Excellent customer intake of 435,000 with Russian mobile being particularly strong Strong customer intake in Russia somewhat dilutes ARPU Tele2 has obtained a fixed line
Slide 9: Southern Europe highlights
Southern Europe highlights (MSEK) Q3 2004 Q3 2003 % Change Operating Revenue 3,854 3,341 +15 EBITDA 183 288 -36 EBIT 146 248 -41 Normalised EBITDA developing well Anti churn campaign launched and early indications are encouraging Sizeable investments in UK launch and ADSL in France impact EBIT
Slide 10: Central Europe highlights
Central Europe highlights (MSEK) Q3 2004 Q3 2003 % Change Operating Revenue 1,300 889 +46 EBITDA 114 -107 - EBIT 63 -151 - An excellent overall performance, particularly in Germany and Poland EBITDA margin for the quarter reaches 9%: it was –12% one year ago Customer intake 563,000 taking tota
Slide 11: Benelux highlights
Benelux highlights (MSEK) Q3 2004 Q3 2003 % Change Operating Revenue 1,064 966 +10 EBITDA 87 57 +53 EBIT 55 27 +104 Strong financial performance Belgium progressing well Netherlands implements churn counter measures 11
Slide 12: Håkan Zadler, CFO Financial Highlights
Håkan Zadler, CFO Financial Highlights
Slide 13: Q3 Results – Balancing Growth, Profitability and Cash Flow
Q3 Results – Balancing Growth, Profitability and Cash Flow ...It’s still there Q3 2004 Difference to Q3 2003 Revenues (MSEK) 10,713 +1,299 +14% EBITDA (MSEK) 1,658 +23 +1% Operating Cash Flow less CAPEX (MSEK) 1,262 -20 -2% EBITDA less CAPEX (MSEK) 1,334 +123 +10% Customer Net Additions (thousands)
Slide 14: EBITDA less CAPEX
EBITDA less CAPEX Q3 Q3 2004 Change 2003 Nordic 1,047 910 -137 Baltic & Russia -5 100 Central -136 82 Southern 259 148 Benelux 39 66 Services 7 28 Rest (excl Nordics) 164 424 +260 14
Slide 15: Sweden
SWEDEN Sweden Fixed line Mobile MSEK Margin % MSEK Margin % 1020 30% 2000 60% 0.22 1000 0.27 0.00 25% 0.08 50% 1600 980 20% 40% 960 ”Not 1200 sustainable” Stablization ex 940 15% UMTS 30% 920 800 10% 20% 900 Interconnect spread 5% 400 versus TeliaSonera 10% 880 860 0% 0 0% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 16: Mobile Sweden
Mobile Sweden (MSEK) Q3 2004 Q3 2003 Change, MSEK Operating Revenue 1,681 1,748 -67 EBITDA 773 919 -146 EBIT 674 817 -143 Interconnect margin to TeliaSonera, SEK 0.00 0.22 Margins stabilised Revenue and margin decline mainly related to cuts in interconnect 16
Slide 17: Tele2 Mobile in Sweden
Tele2 Mobile in Sweden ARPU & MoU 450 250 400 350 200 300 150 ARPU (SEK) 250 MoU 200 100 150 100 50 50 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2002 2002 2003 2004 ARPU postpaid ARPU prepaid MoU postpaid MoU prepaid 17
Slide 18: Tele2 Group
Tele2 Group EBITDA less CAPEX and Net additions MSEK (000's) 1 600 2 500 1 400 2 000 1 200 1 000 1 500 800 600 1 000 400 500 200 0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2002 2003 2004 EBITDA less CAPEX Net additions 18
Slide 19: Central Europe
Central Europe EBITDA and Net Additions MSEK (000's) 150 700 Local pre- select 600 100 Germany 500 50 400 0 300 -50 200 -100 100 -150 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2002 2002 2003 2004 EBITDA Net additions 19
Slide 20: Southern Europe
Southern Europe EBITDA and Net additions (000's) MSEK Dial-Up 400 internet 800 700 300 600 200 500 100 400 0 300 Higher 200 -100 ADSL Churn France/UK 100 -200 Launch 0 -300 -100 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2002 2002 2003 2004 EBITDA Net additions 20
Slide 21: Baltic & Russia
Baltic & Russia EBITDA and Net additions (000's) MSEK 350 500 All GSM networks in Russia 450 300 upgraded 400 250 350 200 300 250 150 200 100 150 100 50 50 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2002 2002 2003 2004 EBITDA Net additions 21
Slide 22: Net Debt
Net Debt NET DEBT TO EBITDA 10 000 4,0 9 000 3,5 8 000 3,0 7 000 2,5 6 000 5 000 2,0 4 000 1,5 3 000 1,0 2 000 0,5 1 000 0 0,0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2001 2001 2002 2002 2002 2002 2003 2003 2003 2003 2004 2004 2004 Net Debt Net Debt to EBITDA 22
Slide 23: Post Acquisition of Song and UTA: The financial resources are there
Post Acquisition of Song and UTA The financial resources are there Net Debt to EBITDA level of 0.3 (annualized) For Tele2 to reach Net Debt to EBITDA level of 2.5, we can add on 14 billion SEK in debt; based on current EBITDA level Hence, we have financial flexibility 23
Slide 24: Development of Profit before and after Tax
Development of Profit before and after Tax 2 500 2 000 1 500 1 000 500 MSEK 0 -500 -1 000 -1 500 -2 000 -2 500 Jan 1 - 30 Sept Jan 1 - 30 Sept Jan 1 - 30 Sept Jan 1 - 30 Sept 2001 2002 2003 2004 Profit before Tax Profit after Tax 24
Slide 25: Q4 2004 financial report out on February 16, 2005
Q4 2004 financial report out on February 16, 2005